Life has no fun on high base as ULIP sales slow down

MUMBAI: Life insurance companies posted a 4.25% year-on-year increase in new business premiums for the April-June quarter, driven largely by private sector players, data from the Life Insurance Council shows.

The muted growth-compared to 22% growth in the April-June 2024 quarter-is due to a high base in the same period last year, regulatory impact from new surrender norms, and a softer push for high-ticket Ulip (unit-linked insurance plan) sales amid ongoing global equity market volatility, insurance experts said.

Private life insurers recorded a 5.32% increase in new premiums, outpacing the 3.43% growth reported by the state-run Life Insurance Corporation of India (LIC). The total premium of the industry grew to ?93,544 crore in April-June 2025 as against ?89,726 crore in April-June 2024.

LIC's growth is affected due to the changes in the minimum ticket size. Among the listed private sector companies, Axis Max Life topped the charts in terms of APE (annual premium equivalent)-annualised value of premium collected from new policies during the quarter-growth, followed by HDFC Life.

Axis Max Life reported 21.66% increase in new business and 23.37% uptick in regular business. HDFC Life reported 14.51% increase in total premium while the regular premium grew 10.81%. ICICI Prudential's total premium grew just 6.47% while its regular premium collections dipped 14% during the quarter, largely due to a slowdown in Ulip sales. SBI Life saw 3.3% increase in premium while regular premium was up 8.22%.

"Owing to a high base impact of Q1FY25, the spill-over effect of the new surrender regulations and a relative slowdown in sales of ULIPs given the volatility in equity markets is likely to drive moderated APE growth for the Life Insurers during Q1FY26," Emkay said in a report.

While insurers have seen moderation in premium growth, margins are expected to improve due to high sale of non-participating products.